Trump says US has struck trade deal with Japan

July 23, 2025

President Donald Trump has announced a significant trade deal with Japan, which includes a $550 billion Japanese investment in the US and a reduction of tariffs on Japanese goods to 15%, down from the threatened 25%. Japan's Prime Minister Shigeru Ishiba confirmed the agreement would reduce US tariffs on Japanese vehicles and parts, noting it was "the lowest figure to date among countries with trade surpluses with the US. " The deal is particularly important for Japan's automotive sector, which represents a quarter of its US exports and accounts for nearly 3% of Japan's economy.

Who is affected

Japanese automotive companies and exporters (Toyota, Nissan, Honda)
US automakers (Ford, General Motors, Stellantis)
US consumers of Japanese goods
Japanese economy, particularly the automotive sector
US investors and businesses receiving the $550 billion Japanese investment
US agricultural producers who may gain better access to Japanese markets

What action is being taken

Japan is investing $550 billion in the United States
The US is reducing tariffs on Japanese vehicles and parts from 25% to 15%
Japan is opening its economy to US goods including cars, trucks, rice, and certain agricultural products
The US is also establishing trade agreements with the Philippines, setting tariffs at 19%

Why it matters

The deal affects Japan's critical automotive sector, which accounts for almost 3% of its economy and represents a quarter of Japan's US exports
The agreement avoids the threatened 25% tariffs that Trump had planned to impose by August 1
The reduced 15% tariff is still higher than the previous 10% levied between April and July
US automakers oppose the deal because it doesn't address the 25% tariffs on imports from their plants in Canada and Mexico
The massive Japanese investment will potentially boost US manufacturing and jobs
The deal comes at a politically sensitive time for Prime Minister Ishiba, whose party recently lost its majority in Japan's upper house

What's next

No explicit next steps stated in the article

Read full article from source: BBC